Thought I'd add a few points about the 2 pension plans.
The old plan, the traditional pension was figured this way: Take your 5 highest paid years, average them together. This is your "highest average annual pay." Let's say it's $50,000. Now take 2% of that number, which for this example would be $1000, and multiply by total years that you worked at least 1000 hrs. 25 years are the most years allowed for this calculation even if you worked 40. For this example you would receive at age 60 $25,000 annually. FedEx considers 60 the full retirement age although you can choose to not take your pension at 60 and continue to work. If you worked more than 25 years your 5 highest paid years will come out of all the years you've worked, not just the first 25. You may choose to take a reduced pension as early as age 55. Each year you take before age 60 will reduce the full amount by 3%. So at 55 your pension would be 15% less.
Some points about the new plan: there are 4 categories for funding your plan: 5%, 6%, 7%, 8%. Which category you are in depends on how many points you have. Points are determined by your age plus years of service. To get the maximum 8% you have to have 75 points. So a 50 year old with 25 years of service would get credits equal to 8% of his gross placed into his account. At the end of each quarter you would get 1% of what you have in your account added as interest. So 4% annually with some slight compounding.
A major problem with this plan is, besides the fact that it pays much less, is that most of it comes in later years. Under the old plan someone who started at 23 could decide at 48 that his 25 year pension is enough and he'd like to try doing something else. Under the new plan that 23 year old is looking at 5% a year for quite a few years. Most likely less than $2000 a year for a number of years. Under $3000 for quite a few more. If by the time he qualifies for the 8% he's making $50k annually that's only $4000 a year into his account. This plan forces people to work a long, long time to have enough to supplement anything else like Social Security or a 401k. Problem is that SS might not be there given 1. How much the current administration is spending and/or 2. The Republicans are trying to end it. The 401k plans depend very much on our ability to fund them, plus a company match, plus the stock market performance. The old plan was a sure thing, a foundation to build your retirement on. Not as good as some companies, but definitely better than what we have now.
I've been reading with interest some of the posts here. I've voiced my opinions on another forum against a union at this time for specific reasons. I believe Mr.FedEx used to post on that Forum and we have had some conflict. I'm not interested in fussing and fighting here, just wanted to add some clarity as I've seen statements all over the place about the pension. One more thing, under their current scheme, no one will top-out in 12 years. Newhires better plan on 25+ years, possibly 30, to catch top-out. Another consideration is that if FedEx takes away raises, like this year, it'll take even longer.
On edit I see Ricochet1a posted much of the same #'s just before I did. His chart illustrates how long it'll take to accumulate anything in the Portable Pension Plan.
